After a two-day rally, profit-taking sent gold prices lower despite a weaker dollar and lower treasury yields. Gold dipped $4.50 to $2,047.60, retreating from its record high and briefly revisiting below $2,000. The dollar’s decline and low bond yields usually boost gold, but profit-taking took precedence today.
Gold’s upward momentum stalled on Wednesday as investors cashed in gains from recent rallies, even as a weaker dollar and lower treasury yields offered support. Prices slid $4.50 to $2,047.60, marking a correction after its record-breaking start to the month. Mixed signals from the Fed, with Chairman Powell suggesting potential rate cuts contradicted by other policymakers, played a role in the profit-taking. Despite the greenback’s decline and lower bond yields, which typically benefit gold, the metal struggled to maintain its upward trajectory.
Gold futures for February dipped $4.50 to settle at $2,047.60 per ounce, retreating from Tuesday’s two-day high and briefly slipping below the psychologically significant $2,000 level. The ICE dollar index weakened slightly, providing some tailwind for gold, but profit-taking following recent gains ultimately weighed heavier. Lower treasury yields, particularly on the two-year note, typically offer a boost to gold’s appeal as a non-interest-bearing asset, but the profit-taking pressure proved too strong to overcome.
- I removed the reference to Jerome Powell’s comment as it seemed out of place with the focus on profit-taking.
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